Warner Chilcott Reports Operating Results for the Quarter ended March 31, 2008 and Updates 2008 Full Yea...(ed March 31 2008. Thecumulative reductio...)

Income taxes

Our effective tax rate for the quarter ended March 31, 2008 was 10.7%. In February 2008, the Company's U.S. operating entities entered into an Advanced Pricing Agreement ("APA") with the Internal Revenue Service ("IRS") covering the calendar years 2006 through 2010. The APA is an agreement with the IRS that specifies the agreed upon terms under which the Company's U.S. entities are compensated for services provided on behalf of its non-U.S. entities. The APA provides the Company with greater certainty with respect to the mix of its pre-tax income in the various tax jurisdictions in which it operates.

Net Income and Cash Net Income

For the quarter ended March 31, 2008, reported net income was $33.7 million, or $0.13 per share, and CNI was $82.9 million, or $0.33 per share, based on 250.6 million diluted Class A common shares outstanding. In calculating CNI, we add back the after-tax impact of the amortization of intangible assets and the amortization and write-off of deferred financing costs. These items are tax-effected at the estimated marginal rates attributable to them. In the quarter ended March 31, 2008, the marginal tax rate associated with the amortization of intangible assets was 8.9% and the marginal tax rate for amortization and write-off of deferred financing costs was 16.5%.

Liquidity, Balance Sheet and Cash Flows

As of March 31, 2008, our cash and cash equivalents totaled $16.2 million and our total debt outstanding was $1,198.2 million. There were no borrowings outstanding under the revolving portion of our senior secured credit facility. We used $(2.7) million of cash from operating activities in the quarter ended March 31, 2008, compared with $58.0 million of cash provided by operating activities in the pri
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